As session breaks out at the 2014 Harvard Arab World Conference, an animated murmur fills Ballroom C at Dubai’s Atlantis hotel. While an eclectic mix of Harvard students, past and present, trails out in search of a caffeine boost, others make a beeline for fellow alumnus, Omar K. Alghanim. As CEO of Alghanim Industries and son if its billionaire chairman Kutayba Alghanim, the clean-cut Kuwaiti from Harvard Business School’s class of 2002 is a figure many an aspiring executive is keen to meet. Despite bad press of late centered on an ongoing family feud, the third generation businessman is leading one of the Gulf’s largest diversified conglomerates with an iron grip on 11 industries from manufacturing to media. But there’s something else driving the 40 year-old. In a region where blood runs thick and opportunity knocks but talent’s all too often out for lunch, the entrepreneurial exec is tackling two of the most pressing issues of our time: skill and meritocracy—or the lack thereof.
With 15,000 employees, 30 companies and 40 countries inside his remit, the man heading up the private firm established in 1930s Kuwait by his intrepid grandfather, Yusuf Ahmed Alghanim, understands the dearth of talent only too well. One reason, perhaps, why he remains attentive as eager protégés seek to share their thoughts. Finding time a little later to gather his own, the CEO who joined the management ranks 14 years ago and also serves as Chairman of Gulf Bank, explains just why his multibillion-dollar powerhouse, cares.
“If you ask me what our competitive advantages are…it’s not because we’re smarter, it’s not because we do strategy better. It’s because we work super hard to make sure we have the best people in the best positions,” asserts the CEO in a flawless American accent honed through years of transatlantic life.
“When I started running the business, I looked across the landscape and said, ‘this is a region that has no shortage of capital and no shortage of opportunities. The true scarce resource is talent’,” recounts an articulate Alghanim in a fashion befitting his friendly yet straight-talking demeanor. “I always felt like the organization that was able to retain, develop and effectively deploy talent, was always going to be the organization—all else equal—that would win.”
In a cut-throat world, “all else” is rarely equal, but the father of four who counts Cadillac, Mars and BP amongst a near-endless list of brands, is applying his hypothesis nonetheless, starting with his top talent—“high pots” as he likes to call them. “I know every one of our high pots as I walk through our organization,” says the Kuwaiti who spent three years with Morgan Stanley in London, before joining the family folds.
Taking time to talk and have lunch with employees might sound cliché—“our people are our greatest resource” have become box ticking buzz words in recent years—but for Alghanim, the proof is in walking the walk. And in a region where hierarchy reigns, the CEO who also chairs youth development organization, INJAZ Kuwait, appears to be striding.
Alghanim is revolutionizing his Kuwait HQ. “We’re moving to completely open floor planning, so nobody has an office; we’re going to have the president, CEO, everybody out on the floor,” he smiles, pondering the mayhem that awaits.
Indeed, the move won’t be without its challenges and Alghanim Industries’ chief HR officer, Jim Batchler had his concerns. “When we first started talking about moving from our traditional office space to a more modern, open work environment, my first reaction was: ‘This is going to be a big change and very hard to do,’” he explains. But reservations were short-lived; “I got past that feeling pretty quickly and began to see this change as an amazing opportunity…the open environment will greatly improve the way we interact as a team.”
The months ahead are going to be a social experiment of sorts, but for Alghanim, his office adventure is testament to company progress. Embarking on such a journey, he says, requires organizational maturity, with communication channels a strong litmus test. “I have junior analysts who will say ‘Omar, that idea’s really dumb’ and I say ‘Ok, well tell me why, let’s talk about it.’”
Alghanim’s approach makes Batchler’s job easier. “One of the great things about working for Omar is I don’t have to push the HR agenda–he is pulling it,” remarks the human resources chief. “He understands that the key to being successful in this region is tied to our ability to attract and retain the right talent…And when the CEO embraces these initiatives, our business partners are quick to get onboard.”
Still, the new plans have been met with resistance from some; managers fearful of the day they are no longer shielded by secretarial gatekeepers. “My response to that is, ‘well, you know guys, that’s going to force our organization to become more mature’,” explains Alghanim, but he is under no illusions. “It’s not going to be pretty!” he laughs. Maybe it’s the prayer beads he has been passing faithfully through his fingers since arriving, or the months of careful planning; either way, an underlying confidence hints that his team will prevail through the tumultuous transition.
Alghanim’s belief in his unconventional tactics is founded in legacy. His grandfather was responsible for helping bring BP to the Middle East, while his father, Kutayba Alghanim, earned a degree from Berkley before going on to implement innovative changes at Alghanim Industries including strategies and systems for delegating decision-making in a decentralized organization. Now, the CEO is building on a trend. “What I did when I came in was really bring in this issue of meritocracy, performance management and delegation of authority.”
But Alghanim’s approach doesn’t just stem from family tradition. After cutting his teeth in Canary Wharf and New York, he opted to forsake high-flying hedge funds for family business where human encounters would shape his outlook. “I started my first job selling used cars,” recalls the CEO. “I took off my suit and tie, put on my dishdasha…and stepped into the open ground of our used car lot.” Faced with demanding customers in blistering heat, talent proved indispensable.
Working up the ranks, the chief executive in the making took on Alghanim Industries’ struggling consumer electronics business. Not only was it losing money, its workforce lacked both work ethic and, quite frankly, force with a team too lethargic to put down their tea and cigarettes. “There were managers who succeeded because of wasta and not merit…our management mocked and made fun of our competitors…sales people were indifferent to customers…it was appalling!” he remarks, traces of dismay still evident in his tone.
Immediately, Alghanim set about replacing poor staff and overhauling HR systems. Within one year, the company’s consumer electronics wing was turning a profit. Now, according to the chief exec, his consumer electronics business is the most profitable in Alghanim Industries’ portfolio.
Building on his electronic endeavors, the CEO is targeting a young, affluent society through his consumer-facing electronics brand, Xcite, with plans to introduce 40 stores to Saudi Arabia. True to its name, Xcite, for Alghanim, offers a unique experience. “We have gaming centers there for youth...and it’s really a very immersive, interactive, exciting place to be,” he enthuses. Naturally, his well-trained employees are at the top of their game.
As true to nature as name, insulation manufacturing is also at the forefront of the CEO’s agenda for his diversified conglomerate, with Saudi Arabia once again in the spotlight. “We have a stone wool plant opening up in Yanbu, using state-of-the-art technology. It’s the second plant of its type in the world using this technology,” he claims. Alghanim’s insulation assets also extend to Turkey through Izocam, a company owned jointly with construction materials firm, Saint Gobain, while insular ambitions are unfolding across the Middle East and India too.
But as business grows, the CEO keeps his geographical exploits firmly in check. The “sweet spot” as he calls it, spans from Turkey, through the Middle East, India, Southeast Asia and parts of Africa too. Admittedly, the reach is sizable, but the point for Alghanim is that as Middle Eastern firms looks westward, he remains rooted. “A lot of companies from our part of the world have aspirations to go to Europe or other more developed economies. We don’t,” he asserts, adding that knowledge of his home turf presents a clear advantage.
Knowing his home territory, however, means understanding it warts and all. This entails an encounter once more with the talent void in a nation where over 90% of the Kuwaiti workforce is employed by government and little incentive exists to step out of the comfort zone.
Waking up to the challenges, Kuwait’s government has established a $7 billion SME fund and Alghanim is looking on the bright side. “Let’s talk about some of the good stuff that’s happening….in the last couple of years there’s been a lot more youth entering the private sector; not only through employment but entrepreneurship,” he remarks. “There are incredibly talented young women and men out there creating some great ideas. I’m really excited about that.”
And let’s not forget, Kuwait, in combo with a top notch US education, hasn’t served one of its homegrown corporate leaders too poorly either as he continues a family legacy of corporate success. There may be a way to go in Omar Alghanim’s campaign to turn nepotism to meritocracy and mediocrity to talent, but as the Arab world’s hungry Harvard graduates seek his counsel, Alghanim Industries’ CEO may be one of the first Kuwaitis to take a talented stand, but he won’t be the last.